Tax Credit Expiring in Illinois
If you’re a driver currently living in Illinois, you’ve probably heard the news about the expiring tax credit on trade-in vehicles commencing on January 1, 2020.
While this expiring credit won’t affect all vehicle sales, it’s an important development to keep in mind. This is especially true if you’re looking to trade in your current vehicle during the next few months.
At BMW of Schererville, we’re committed to helping drivers make the best decision when choosing a new BMW. To learn more about the trade tax credit expiring in Illinois and how we can help, continue reading our short guide. Contact us today for more information!
Currently, the state of Illinois collects no sales tax on a vehicle’s trade-in value. In a way, this serves as a credit for drivers to put toward the purchase of a new vehicle..
For example, today you might decide to purchase a new BMW X5 for $37,500 and have your trade-in vehicle appraised at $20,000. Currently, you’d only have to pay sales tax on the difference of $17,500.
The bottom line: You’ll have to pay hundreds of dollars in additional sales tax if you decide to purchase the vehicle in January.
It’s equally important to note that while this 6.25% rate affects all Illinois residents, you might also be subject to additional local taxes. These typically average around 2.49%. If you live in a city like Chicago, it could be even higher.
Unless you’re planning to permanently move out of state, the only way to avoid this new tax is to trade in your current vehicle before the end of 2019.
Fortunately, our team is ready to help. The friendly professionals in our finance center are well-versed on this very topic and can answer all your questions.
Want to get an initial trade-in estimate on your current vehicle? Take advantage of our Value Your Trade tool to receive a fair market quote.
If you’ve been thinking about adding a new or pre-owned BMW to your lineup, there’s no better time than the present.
Contact us today to take advantage of the current tax credit. Before you know it, you’ll be hitting the streets of Illinois in a luxury BMW!